The pending FirstEnergy rate plan should be scrapped

April 7, 2004

Shari Weir, Cleveland Program Director
Ohio Citizen Action
Statement for press briefings in Kent, Eastlake, and Brooklyn

The pending FirstEnergy rate plan should be scrapped. FirstEnergy customers have already written 20,000 letters and postcards to Gov. Robert Taft, announced gubernatorial candidates and mayors with that message. The proposal is being pushed by the utility as a "rate stabilization" plan for customers, but in fact, all the benefits would go to FirstEnergy from our artificially inflated bills.

And while the billions of dollars that the plan would cost northern Ohioans should be enough to prompt the Public Utilities Commission to reject it, the plan has a second disastrous provision: it would destroy competition.

When the Ohio General Assembly was considering opening the electric market to competition, Ohio Citizen Action realized from the experience in other states that power companies were only interested in competing for big customers. The common sense solution was to allow local governments to shop for electricity on behalf of their residents and businesses. This offered the savings of bulk buying, let suppliers acquire small customers without prohibitively expensive advertising, and eliminated hassles for consumers trying to navigate the market.

Now with the track record of three years of electric competition in Ohio, it is absolutely clear that the only thing that is working for residential customers and many small businesses is local government aggregation. Apparently, FirstEnergy intends to wipe out this innovative consumer benefit. FirstEnergy’s plan would erase savings now achieved through aggregation and erect other barriers to stack the deck so that the only competitor able to survive would be its own subsidiary, FirstEnergy Solutions.

Local government aggregation was included in the electric competition bill because of strong grassroots support and because mayors and city council members worked hard for it. It will take that same coalition, along with the new Consumers’ Counsel, to stop the FirstEnergy rate case. This time we need strong leadership from the Consumers’ Counsel, widespread grassroots opposition and mayors and city councils raising a ruckus about how the rate plan will cost families hundreds of dollars each year and needlessly suck billions of dollars from the state’s economy.